Lying for their loan: 1 in 8 home owners fibbed on the application
Thousands of Aussie homeowners have told a fib in order to secure their home loan, according to new research by Finder.
A Finder survey of 1,114 respondents – 310 of which have a mortgage – revealed 1 in 8 (13%) lied on their home loan application.
That's the equivalent of 429,000 mortgagors who admit they falsified details during the home-buying process.
The research found a worrying 4% of Aussie mortgagors admit they lied about their income – more than 100,000 people.
The same proportion (4%) lied about how much debt they had during the application process.
Richard Whitten, home loans expert at Finder, said stretching the truth during the home-buying process was a recipe for disaster.
"Falsifying information on a mortgage application can have serious consequences. Not only could it potentially qualify as fraud, but it could also lead to the loss of your home in a worst-case scenario.
"While the lies might go unnoticed – the financial burden of an unaffordable loan could create a lot of stress."
Whitten said it's not totally surprising that house hunters are lying about their finances.
"As housing affordability deteriorates, Aussies are scared of being rejected and missing out on getting on the property ladder.
"While small inaccuracies may not be the end of the world, if a lender finds a big discrepancy in the figures you've given them or you've outright lied about your financial position, the consequences could be severe.
"Home loan contracts typically contain wording around providing misleading or incorrect information to a lender. In the worst case, lying on a mortgage application is grounds for a default event, meaning the lender could sell your property.
"Legality aside, you're putting yourself in a risky position if you lie on your application and borrow more than you can afford."
Whitten urged Aussies not to inflate income figures or omit a loan or credit card when applying for a home loan.
"It's important to track expenses as people sometimes forget where their money goes.
"Lenders cross-check everything and applicants who intentionally provide incorrect information could potentially receive a black mark on their credit score, and in severe cases, applicants could have their loan called in, meaning they have to repay the loan in a hurry."
| Have you had to do any of the following in order to secure your home loan? | |
|---|---|
| Lie about my debt | 4% |
| Lie about my income | 4% |
| Lie about my savings | 9% |
| None of the above | 87% |
| Source: Finder survey of 310 Australians with a mortgage, November 2022 |
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